Poor Guidance and Great Earnings Point to Strong Stock Returns

Earnings season offers investors a number of second chances to buy great stocks. One of the best ways to get an opportunity is when a stock sells off for providing poor guidance. The market likes certainty, and is willing to pay up for it. While guidance may be weak, a company that’s reporting great earnings should head higher over time, no matter what guidance expectations it makes for investors (if any). Cybersecurity stocks stumbled earlier this week after Palo Alto Networks (PANW) ...
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Grab Out-of-Favor Earnings Winners

Earnings season shows which companies are able to navigate today’s economy, and which companies are missing out. While the economic data shows strong topline growth, there’s been slowing demand across a number of major sectors in the economy. For instance, the housing market has slowed as interest rates have soared. Homeowners are electing to stay in their existing homes for longer. That should be good for home improvement projects, and companies associated with that trend. However, that doesn’t appear to be the ...
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Rising Profitability and Upside Catalysts Bode Well for this Digital Leader

Digital assets posted strong returns last year, and are on track for an even stronger return this year. That will likely be driven in part by the new bitcoin ETFs, as well as the upcoming halving of bitcoin. As bitcoin moves higher, other digital assets should also rise in value. And companies that play to that trend should benefit. For now, the best returns are likely to come from industry leaders.  As the custodian for a majority of the new bitcoin ETFs, ...
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This Unloved Commodity Play May Be Forming a Bottom

Commodity markets make big moves both higher and lower. Those moves can last for years. Sometimes, there’s a broader trend that can push a commodity market in one direction or another. Right now, the lithium market is out of favor. The biggest driver of demand is for electric vehicles (EVs). With a number of automakers scaling back EV plans, lithium prices have been dropping. But there are some signs of a turnaround. One sign comes from leading lithium producer Albemarle (ALB). Shares ...
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There Are Always Overlooked Opportunities in Out-of-Favor Sectors

With so much focus on tech stocks over the past year, other sectors of the market look like a relative bargain. Many companies have been improving their earnings and revenues. But being in an out-of-favor sector means shares may become a better value. One such sector is the defense sector. It tends to perform well over time. And with rising global tensions, it could see further solid returns this year. In the defense space, L3Harris (LHX) looks like a reasonable buy. Shares ...
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Watch this Key Metric to Determine a Company’s Future

Many companies still operate in the real world, where they have to manufacture and ship out physical goods. That can include anything from raw commodities to advanced computer chips. Each of these companies will look at its inventories to gauge their success. Rising inventories likely means slowing sales, and in turn, slowing revenues. Declining inventories can signal the opposite, that sales are on the rise, and maybe even that raising prices might be a good idea. Networking equipment manufacturer Cisco Systems (CSCO) ...
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Use the Silliness of Earnings Season to Your Benefit

Earnings season is often full of surprises. That means a company can report great results, but sell off as traders didn’t think they were good enough. Or a company could lose money, but not as much as expected. When that happens, shares often soar. This can happen across any sector. But a great company in a long-term uptrend will likely keep moving with that uptrend, even amid any earnings season silliness. The latest market overreaction has hit Marriott International (MAR). The hotel ...
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Continue to Stock Up on Market-Lagging Brands

Long-term investors still have a wide shopping list of great companies trading well off their highs. Many stocks outside of the big tech space make the grade. Especially companies that have strong brands. The past few years have shown that high inflation can weigh on a company’s profitability. But a great company can keep raising prices faster than they lose customers. In that situation, they’re set up well for long-term inflation, even if it slows back to lower levels. That also means ...
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